Avoid Foreclosure: Option 3- Equity Sharing


Definition: Joint ownership of a property by one or more owner-investors and one or more owner-occupants. The owner-investors get the benefit of depreciation, and the owner-occupants can treat a part of their monthly mortgage payments as rent, and benefit from tax write-offs for interest and property taxes. When the property is sold, both types of owners share in the profit or loss realized from the sale or refinance.

This might be for you if there is some equity in the house and you would like to continue to hold it. It is vital you involve an attorney to put this together assuring all documents are formally filed correctly, protecting your asset. The benefit to you in utilizing this option is you are able to keep your house and lower your payments. Since the equity sharing partner would see the value of their investment at a later time, a plan for this would need to be in place in agreements filed with attorney, at time of sale.


a. Partner(s) put up part of the required cash to cure foreclosure
b. Partner(s) pay part of monthly payment
c. Partner(s) get some percentage of ownership
d. Partner(s) get their money out at refinancing or sale down the road

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